A generational, gender and city-tier analysis 

Although the majority of Chinese consumers have only been exposed to luxury goods for the past 40 years, China has grown into the world’s second-largest luxury market in that time. At the end of 2019, Mazars launched a survey in order to gain insight into the relationship between luxury consumption behaviour and the values, lifestyles and social backgrounds of four generations of consumers. The questionnaire was designed to explore Chinese consumers’ definition of luxury goods, ways of obtaining brand information, categories of products frequently purchased, frequency and channels of purchase, and factors influencing purchasing decisions, among other aspects.

A total of 3,235 respondents—covering Gen Z (aged under 24), millennials (25–38), Gen X (39–54) and baby boomers (55–73)—took part. Mazars has released the findings of this survey to provide a profound and thorough research report outlining the “profile of all generations of consumers”, which will be invaluable for businesses looking to have an in-depth knowledge of the psychological needs and habits of Chinese luxury consumers.

Consumer trends by generation

In a webinar on the results of the survey, Dr Julie Laulusa, managing director of Mazars, remarked that the differences in consumption habits and consumption views among four generations of luxury consumers are currently significantly marked. Against the backdrop of post-90s and post-95s generations gradually becoming the main force of consumption in the Chinese market, Mazars hopes that its research report covering all ages can provide some insights for luxury industry stakeholders.

Lawrence Shum, chief operating officer of Galeries Lafayette China, made a similar point about the unlimited potential of post-95s in luxury consumption: he believes that they cannot be overlooked by the future luxury market. Mr Shum said this group is a very important source of inspiration for Galeries Lafayette. Therefore, although post-80s and post-90s are still the main consumers targeted by Galeries Lafayette, the company also actively innovate in developing store events so as to win the favour of young consumers through a rich choice and vivid forms of activities.

In addition to greater willingness to spend and stronger buying power, post-95s are recognised as ‘digital natives’. They are naturally more willing to use digital channels to obtain luxury information and pay for digital marketing. This trend was borne out in Mazars’ survey: more and more consumers are using mobile phones as the main channel for accessing information and buying goods, with a utilisation rate led by Gen Z that is nearly 10 percentage points higher than that of millennials.

Mathieu Delmas, managing director, Piaget China, believes that: “The luxury consumption concept of Chinese consumers is also maturing and evolving. Take Piaget for instance, we officially entered Tmall this year to better cater for the consumption habits of Gen Z. According to our observations, as the digital natives, Gen Z is more willing to make online shopping comfortably at home with the premise that what they buy are authentic brand products.”

Consumers by city tiers

The survey results show that first-tier cities, with nearly 80 per cent of luxury consumers, rank highest in terms of luxury purchasing power among the top three tiers of cities, though second-tier cities have impressive market prospects. In third-tier cities, with rapid urbanisation and the rising popularity of online and mobile shopping platforms, the number of luxury consumers is growing.

Stephane Wilmet, chief consumer officer of L’Oréal China, provided insight on this during the webinar: “The consumers in third-tier cities have the same pursuit of life quality as consumers in first- and second-tier cities. They are willing to spend time and money, and also have enough disposable income to consume, especially on cosmetics, pan-entertainment and consumer goods.”

Although the COVID-19 outbreak has severely dragged down the global economic outlook in 2020, the Chinese luxury market has continued to perform well. From the market having slowly picked up since April to the promotions launched by brands during the Labour Day holidays in May, consumption rebounding in the post-pandemic period has become a hot topic. Various predictions suggest that China and Asia will lead the entire luxury market out of the slump. China is also expected to be the best performing luxury market in 2020. However, how to make Chinese consumers open their wallets under the new consumption normal, especially Gen Z consumers, is still a vital challenge ahead of many luxury brand managers.

In her concluding remarks to the webinar, Dr Laulusa said that Gen X, millennials and Gen Z have become important supporters of luxury consumption in China. Their consumption views have gradually come into maturity. Consumers across different generations have their own preferences, and are willing to try new things and embrace innovations. Based on the characteristics of the Chinese market, luxury brand practitioners should constantly revise their business strategies to keep pace with the changes in Chinese consumption concepts, and, importantly, to strike a balance between maintaining the unique essence of a luxury brand, cater to market demand and adapt to the ever-changing social environment in China, thus gaining a bigger share in the fiercely competitive market.

Note: The Chinese Luxury Brand Consumers — A Generational, Gender and City-tier Analysis was first officially published on Mazars’ official website.

Mazars is an international, integrated and independent firm, specialising in audit, accountancy, advisory, tax, and legal services. Mazars can rely on the skills of 40,400 professionals across all continents, which make up its integrated partnership in Europe, Africa, the Middle East, Asia Pacific, North America, Latin America and the Caribbean. Present in 91 countries and territories, the firm draws on the expertise of its professionals to assist major international groups, small and medium-sized enterprises, private investors and public bodies at every stage in their development.